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Stocks Plummet Amid Worries About Europe, Fiscal Cliff

The U.S. stock market recorded large losses on Wednesday as the mood on Wall Street continues to deteriorate amid worries over Europe and the fiscal cliff. The Dow Jones Industrial Average fell 185 points to close at 12,571. The widely watched blue-chip index traded in a range between 12,542 and 12,797.

The SPDR S&P 500 ETF (NYSE: SPY) lost 1.35 percent to $135.93. The sell off caused volume to spike, with around 178.6 million SPY shares trading hands compared to a 3-month daily average of 123.6 million.

The PowerShares QQQ Trust ETF (NASDAQ: QQQ)< which tracks the performance of the Nasdaq 100, fell 1.17 percent to $62.24. The losses would have been worse, but a 5 percent gain for Cisco (NASDAQ: CSCO) after reporting strong earnings helped the ETF.

Crude oil was higher on the session despite the weak stock market. NYMEX crude futures, the U.S. benchmark, were last trading up 1.08 percent to $86.30. Brent crude futures climbed 1.34 percent to $109.71 and the U.S. Oil Fund ETF (NYSE: USO) closed trading up 1.15 percent to $31.77.

Precious metals eked out small gains. COMEX gold futures were last up 0.06 percent to $1,725.80 and silver futures had risen 0.52 percent to $32.66. The heavily traded SPDR Gold Trust ETF (NYSE: GLD) closed the day essentially flat at $167.14.

The sell-off in stocks helped Treasuries rise slightly. The iShares Barclays 20+ Year Treasury Bond ETF (NYSE: TLT) added 0.09 percent to $126.73. The yield on the 10-Year Note was basically flat on the day at 1.59 percent.

The U.S. dollar recorded a very small loss on the session. The PowerShares DB US Dollar Index Bullish ETF (NYSE: UUP), which tracks the performance of the greenback versus a basket of foreign currencies, fell 0.05 percent to $22.20. At last check, the closely watched EUR/USD pair was trading at $1.2746.